Current perception of a national philanthropic reinvigoration is largely that, a perception
By James Sturgeon
11-28-2006
Any casually-informed person who has read a newspaper this past year has likely become aware of something on the rise. A movement that first appeared on news headlines across the world, but soon gained homegrown interest here in Canada.
In early June, U.S. billionaire Warren Buffett sparked massive attention by donating three quarters of his personal fortune to charity, while in September, U.K. industrialist Sir Richard Branson attracted the international spotlight with his pledge of a few billion to help curtail global warming.
Here in Canada the story continued - albeit on not quite the same scale, but still unprecedented.
Ontario real-estate developer Larry Tanenbaum donated $25 million to Toronto’s Mount Sinai Hospital in July and another $50 million to a host of other charitable causes. In August, mining executive Peter Munk pledged $37 million to Toronto General Hospital – the single largest medical donation in Canadian history up until then. Add to these sums Vancouver entrepreneur Michael Audain’s recent $2 million gift to the National Gallery in Ottawa, and one may surmise that some kind of movement was forming.
Since the colossal Buffett donation, philanthropy has been seemingly ubiquitous. National headlines have trumpeted “Canada charity comes of age,” while heralded “The nouveau philanthropy.”
As momentum in the media has built, two more elements have joined the story of an apparently reinvigorated philanthropic spirit in Canada. One has been the much-discussed transfer of wealth to baby boomers – on the cusp of retirement - from their frugal parents. The other focus is a purported shift in corporate philanthropy toward a more engaged role in the nonprofit sector as Canadian bluechips like EnCana corp., The Toronto-Dominion Bank and Royal Bank have recently rolled out comprehensive philanthropic strategies.
Alongside the mega-donations, a myriad of coverage has recently adorned both developments.
Yet despite the generous picture being developed through glowing media reports, critics and nonprofit executives are only tentatively allied in their agreement that Canadian philanthropy has been emboldened of late, while opinion is convoluted on why this is happening and even questioning whether the purportedly effusive movement is good for the state of philanthropy at all.
Lisa Hartford, media communications director for Imagine Canada, the country’s largest agency for philanthropic research and advocacy, believes “this is happening." Yet Hartford is quick to note that Imagine Canada’s reports haven’t caught up to what she feels is occurring right now, “It’s all anecdotal - it’s what you read in the newspapers.”
Julia Moulden, Toronto-based author of The New Radicals: How Boomers are Reinventing Their Work to Help Save the World is more certain. “Oh yes, absolutely, there’s definitely been a revitalization,” she says, “It’s been evidenced by all kinds of things.”
Ken Wymen, program coordinator for Fundraising and Volunteer Management at The Humber Institute of Advanced Learning and Technology, also agrees, “Certainly, there have been some amazingly large gifts that are totally unprecedented,” he says. Yet Wymen cautiously adds “there are several factors at play,” and that there remain several issues “not being sufficiently addressed.”
Much of this guarded optimism stems from the attention paid toward the tens of millions of dollars that have poured forth to institutions and nonprofit organizations from Canadians this year.
Alongside the gifts mentioned above, other notable donations have been real-estate development brothers Joseph and Wolf Lebovic, who trumped Munk’s donation in October with a $50 million commitment to Mount Sinai Hospital in Toronto, while Publisher Ken Thomson posthumously willed $50 million to the Art Gallery of Ontario last June.
In fact, according to the Globe & Mail, there have been no less than 120 multi-million dollar donations since the beginning of 2005.
“Certainly attention has been paid toward the major donations,” Wymen says, “That is mostly a good thing.”
Wymen likens this year’s major donations to a philanthropic ‘arms race’ among the rich, “If that person can get their name in the media by giving away just a few million, I can do that too,” he says.
But the current outpouring begs the question, why now?
Interestingly, both Wymen and Hartford point toward a fact that has played a dominant role in the recent run of enormous donations, but has remained outside of most media coverage – the elimination of the capital gains tax for nonprofits.
The measure, from last May’s Federal budget, allows for a tax-free transfer of public securities and other non-monetary donations to charities, who can then liquidate those assets without any taxation.
“That has clearly stimulated $50 million or more in giving.” Hartford adds that it “was quite a successful win for the nonprofit sector.” It was also a win, however, for wealthy Canadians looking to lower their taxable income. The facts behind affluent donor levels might not be as laudable as current events could lead one to conclude.
“The downside is that some people who are more generous in giving as a percentage of their income are not being championed as much as the people who can give spectacularly large gifts,” says Wymen.
In fact, the latest report from Imagine Canada indicates that the lowest-income households ($6-19,000) donate on average close to two per cent of their personal income while the most affluent ($100,000+) give a significantly lower 0.42. Wymen concludes that the current largesse witnessed among the rich “may not be as generous as one might think.”
Yet, to be sure, the current philanthropic ‘arms race’ among affluent Canadians is a positive and praiseworthy development – even indicative of an emergent ‘golden age,’ as some media have touted. But the attention paid toward these generous acts masks a disquieting issue in that the least fortunate Canadians routinely give more to the common good than the most affluent.
It’s a fact that has received little attention in the face of the more spectacular donations of late.
The second element being cited in this unprecedented period of giving is the story of how baby boomers are winding down their careers while simultaneously on the cusp of collectively inheriting over $1 trillion from their frugal, Depression-raised parents.
What does this mean?
It means that the largest demographic in Canadian history is at the peak of its earning potential and is about to receive the largest intergenerational transfer of wealth ever, just as the boomers are about to trot off into retirement.
Last year a Hamilton Spectator report labeled this phenomenon “the future of philanthropy,” while the Toronto Star this summer said the trend signaled “boom years” for the nonprofit sector.
“Boomers are waking up and saying ‘I’m not going to live forever,’ and have this sense that ‘I want to do something more,’” says Jula Moulden, who’s book is scheduled for release in early 2007.
She notes a subject in her book who ran a consulting firm until last year, when in his late-50s, he converted the entire business into a nonprofit firm focused on sustainable development. “There are so many examples of this,” Moulden says. In terms of donations from boomers, Moulden adds, “The number (of boomers) is huge, so there are many groups (benefiting).”
When ask if the boomer phenomenon was positively impacting the current uptick, Wymen’s response was “Clearly it does.” He adds “Many boomers have discovered over perhaps the last decade that they have more money than they ever imagined, and have started to think of what to do with it.”
Recent data shows that Canadian donations are indeed up, totaling over $7.8 billion last year, growing by just under 14 per cent from 2004.
Yet the number of Canadians who actually donated moved up by less than one per cent in the same survey, meaning virtually the same number of donors simply gave larger donations.
What’s Hartford’s opinion on the injection of boomer dollars into the nonprofit sector?
“I don’t know if the numbers reflect that,” she says. “We have fewer people giving to charity, despite that on average, they’re giving more,” that’s “a very bad thing,” citing that while more people are in a position to give, data isn’t reflecting that they are.
Hartford cautions, however, that it’s probably “far too early” to understand the effects of the boomer phenomenon. She says that Imagine Canada is seeking funding to exam the boomer affect on national philanthropy in its next report, which is scheduled for release in early 2009.
Aside from the claims of a reinvigorated generosity lauded upon the affluent and boomer demographics in this new philanthropy, there is a third issue of dubious authenticity.
In July a National Post article followed the story of 600 Toronto business leaders who took time out of their busy workdays to help build a new playground in the city’s poor Lawrence Heights neighborhood.
“Being good is the new citizenship,” it read, “particularly in the corporate world.” Other media have echoed this sentiment, reporting that a shift has taken place in the last couple of years toward “social investments,” and an emboldened corporate philanthropy.
Hartford agrees, “There’s a change happening in the last few years,” she says, “There’s much more of a true sponsorship and collaboration between business and its nonprofit partners.”
Hartford uses Imagine Canada’s Caring Company program as an example. In the program, companies pledge one per cent of their pre-tax profit to community programs outlined and developed through Imagine Canada.
In its first year of operation corporate giants like EnCana corp., Telus corp., Toronto-Dominion Bank, Shell Canada, ltd., and RBC have jumped on board.
Wymen agrees that there has been a corporate shift, but believes it isn’t a positive one. “Philanthropy is when corporations do good things because they are good. Corporate sponsorship is where (companies) do things that might happen to be good, but are primarily good for the corporation – like public relations.”
He warns “charities are now expected to deliver more marketing bang for the buck.” Wymen explains that this is leaving many less glamorous causes vulnerable to neglect, while inflating the visibility of corporate philanthropy.
But perhaps the most startling fact in light of this charitable awakening is the issue of funding. Imagine Canada’s own statistics reveal that despite the current perception that corporations are doing more, they’re not.
The latest figures reveal that fully one half of all nonprofit funding is attributable to various levels of government (and in turn, the taxpayer), while corporate Canada on average chips in an almost incomparable three per cent of nonprofit funding.
“It’s a growing program,” Hartford admits.
In June, the U.S. magazine Forbes predicted that “It’s Only Just Begun,” for an era where mega-donations, boomer support and corporate largesse would lift international philanthropy to lofty heights.
Canada has mirrored this story in kind, with a flurry of reports and stories exalting a ‘new era’ of generosity in this country, and indeed there have been some optimistic developments that deserve attention - the Federal tax measure, the unprecedented donations and overall growth in donor dollars.
However, before a ‘golden age’ can be declared, opinion must be stronger and reinforced by even stronger evidence. The most comprehensive report on the current climate will not be available until early 2009, where perception will give way to fact and a true measure of where philanthropy in Canada sits now will be revealed.
